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Guaranteed Minimum Pensions Increase Order 2007

There was a small question about why we do not uprate the 25p age addition for the over-80s. Perhaps that emphasises a bit some of the complexity in the system. I am advised that no Government have increased it since it was introduced in 1971, but this Government have obviously done much to help older pensioners in particular: free television licences for those aged over 75, winter fuel payments worth £200 per household and £300 per household with someone over 80, andso on. Pension credit take-up was raised by the noble Lord, Lord Skelmersdale. It is an important point; we need to make sure that people claim and receive the benefits to which they are entitled. We are writing to everyone whom we believe may have an entitlementto pension credit, encouraging them to apply and advising how the Pension Service can help them to do so. Over 2 million mailings are planned through 2006-07. We offer face-to-face visits and a full benefit entitlement check to the most highly eligible and vulnerable pensioners, with plans to undertake up to1 million successful home visits during 2006-07.That underlines the Government’s commitment to addressing the issues. The noble Lord, Lord Kirkwood, talked about the process and the thinking behind the upratings, and asked whether someone just pressed a button and the figures spewed out. If you look at the data, you realise that that is not true. I think that he touched on the point about the number of potential rates, tapers and so on in the system. Some are uprated, some are not. Some are uprated by RPI, some by Rossi, some by the earnings index. In particular, the standard minimum guarantee for pension credit was uprated by 4.4 per cent, fulfilling a commitment that the Government made to protect the poorest pensioners. Some benefits since 1996-97 have been uprated significantly above RPI. Let us look at income support. The child allowance for those aged up to 11 has increased in real terms by something like 120 per cent over that period. The carer’s premium has increased in real terms by59 per cent over that period. There is a range of other such benefits, such as the disabled child premium, which has increased in real terms by 75 per cent since 1996-97. Through pension credit, we dealt in part with protecting people and making sure that the working population and retired people share in the wealth that the country is creating, but the pension reform that is going through another place at the moment will relink the basic state pension to earnings. That will be welcomed by all. The commitment is to do it when it is affordable and by the end of the next Parliament, which is a very clear commitment. If you look at outcomes for child poverty, which was moving inexorably upwards when this Government came into being, there have been some genuine improvements. On the position of pensioners, which I outlined when I moved the order, you are now less likely to be poor as a pensioner than as a member of the population as a whole. That is quite a significant change. The noble Lord, Lord Kirkwood, raised the old chestnut of the National Insurance Fund and its surplus. I understand that, since that surplus is routinely loaned back to the Government, if it were to be used in the way he suggests it would simply lead to equal and opposite tax increases. It is not a surplus in the sense that it is free for use without looking at the general consequences for taxation. I have dealt with each of the points of the noble Lords, Lord Kirkwood and Lord Skelmersdale. My noble friend Lady Hollis was passionate and knowledgeable on these issues as always. She asked how we effectively make work pay, encouraging people into work and removing disincentives and the steps in the tapers and the system we have. In many ways, that debate is beyond the uprating order before us today. My noble friend is quite right that a number of the earnings disregards have not been uprated for a long time. The income support disregards have not changed since—